Kraton (NYSE:KRA) and International Flavors & Fragrances (NYSE:IFF) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.
Institutional and Insider Ownership
93.4% of Kraton shares are held by institutional investors. Comparatively, 94.4% of International Flavors & Fragrances shares are held by institutional investors. 3.3% of Kraton shares are held by insiders. Comparatively, 0.4% of International Flavors & Fragrances shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility and Risk
Kraton has a beta of 2.34, indicating that its stock price is 134% more volatile than the S&P 500. Comparatively, International Flavors & Fragrances has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and target prices for Kraton and International Flavors & Fragrances, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Kraton | 1 | 1 | 2 | 0 | 2.25 |
International Flavors & Fragrances | 0 | 4 | 8 | 0 | 2.67 |
Kraton presently has a consensus price target of $21.20, suggesting a potential downside of 44.28%. International Flavors & Fragrances has a consensus price target of $141.1167, suggesting a potential upside of 7.81%. Given International Flavors & Fragrances' stronger consensus rating and higher possible upside, analysts clearly believe International Flavors & Fragrances is more favorable than Kraton.
Profitability
This table compares Kraton and International Flavors & Fragrances' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Kraton | -14.37% | 3.40% | 1.10% |
International Flavors & Fragrances | 7.44% | 11.00% | 5.10% |
Earnings & Valuation
This table compares Kraton and International Flavors & Fragrances' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Kraton | $1.80 billion | 0.67 | $51.31 million | $2.94 | 12.94 |
International Flavors & Fragrances | $5.14 billion | 6.33 | $455.87 million | $6.17 | 21.21 |
International Flavors & Fragrances has higher revenue and earnings than Kraton. Kraton is trading at a lower price-to-earnings ratio than International Flavors & Fragrances, indicating that it is currently the more affordable of the two stocks.
Summary
International Flavors & Fragrances beats Kraton on 12 of the 14 factors compared between the two stocks.